Legal Question in Real Estate Law in Arizona

We are about to close on our first house this week. The HUD approval was sent to our (Buyer's) bank and approved. Then sent to the Seller's bank. We put $1000 earnest money down and in our contract says to be refunded to buyer at closing. The seller's bank and our bank are now stating the earnest money needs to be applied to the principle. They will not approve it otherwise. We threatened with walking away and the selling agent says we won't get our money back. We feel we are getting taken advantge of since they know we have invested so much time. We were supposed to sign papers in the next day or two and the house is set to foreclose in 1 week. We want the house but don't want them to have our earnest money? What should we do?


Asked on 7/25/11, 8:43 pm

1 Answer from Attorneys
Scott Hyder Law Office of Scott W. Hyder, PLC

I'm confused. If it is applied towards the principal purchase price, you are still getting the benefit of the $1000 (you pay $1000 less at closing with new funds). If you get it refunded, you still have to pay $1000 more to apply towards the purchase price. You need to have a lawyer review your contract.

http://scotthyderlaw.com/

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Answered on 7/26/11, 5:48 am


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